Ahluwalia favours increased government expenditure in health sector

New Delhi, Sep. 9 (ANI): The Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, said on Thursday that the central government should increase its contribution in the health sector.

Speaking at the 4th International Health Insurance Summit 2010 in the national capital today, Ahluwalia, said: "Spending on the health sector in India is five to six percent of our Gross Domestic Product (GDP) and is almost similar to that of other countries of our level. But the difference is, out of this five percent, the central government and the state government's contribution is just one percent. The rest four percent is private expenditure. Whereas in other countries, the contribution of government in health expenditure is much more as compared to India," said Ahluwalia.

Ahluwalia also said that in the 11th Five-Year Plan, the government included an increase in the government's public expenditure on health.

"In the Eleventh Five-Year Plan (2007-2012), we included a point that the government's public expenditure on health should be increased from one percent to two-three percent and we have increased it a bit. Earlier, it was less then one percent but now it is more than one percent, and we hope that it will increase more. We want it to reach till two-three percent," said Ahluwalia.

The established per capita spending on health is around rupees 320 per year with the major input from private households (75 percent).

State governments contribute 15.2 percent and the central government contributes 5.2 percent.

Health insurance is a way of increasing accessibility to quality healthcare especially for private healthcare, which is very costly.

In order to encourage foreign health insurers to enter the Indian market the government has recently proposed to raise the Foreign Direct Investment (FDI) limit in insurance from 26 percent to 49 percent. (ANI)